Uefa outlaw long contract transfer loophole exploited by Chelsea
Chelsea and other clubs will no longer be able to exploit a transfer loophole by handing new signings long contracts after Uefa outlawed the practice.
Eight of Chelsea’s most recent signings, including Enzo Fernandez, Mykhailo Mudryk and new arrival Christopher Nkunku joined on extra-long contracts, some lasting until 2031.
The strategy helped the Blues to spread the cost of the signings over a longer period and therefore comply with Uefa’s Financial Fair Play rules, avoiding a European ban.
Chelsea irked rivals
But the ploy irked rival clubs, and Uefa agreed to take action at a meeting of the European governing body’s executive committee in Switzerland on Wednesday.
Effective immediately, clubs will be limited to spreading the cost of transfer fees over a maximum of five years. Existing deals remain unaffected.
Stephen Taylor Heath, Head of Sports Law at JMW Solicitors, said some teams may be forced “to revise their recruitment plans for the immediate future as being limited to spreading a transfer fee over five years may then require some sides to reduce activity in order to be financially compliant.”
The change applies to the way that transfer fees are accounted for on a club’s books, rather than the payment schedule that has been agreed between buying and selling team.
Chelsea’s signing of Ukraine winger Mudryk for £89m in January on an eight-and-a-half-year contract effectively meant he would represent a cost of just over £10m a year in the club’s accounts.
Had he signed a five-year contract instead, the accounting cost would have been close to £14m per year. The difference may seem small but, combined with other similar deals, can add up to an eight-figure swing.
This helps Chelsea meet their obligations under FFP rules, which regulate the amount of money clubs are may lose and still be eligible for completions such as the Champions League.
Racking up spending
It also allowed them to continue racking up more than £500m of spending on new players since the Todd Boehly-Clearlake consortium bought the club last summer.
Taylor Heath added: “A practical effect of the regulations is that as there is no longer an incentive for a club to offer a longer deal than five years for amortisation purposes, therefore the trend of offering these long-term contracts will be phased out as very few situations exist where a player and/or team would want a longer contractual commitment.
“Those sides engaging in such deals will argue that they are simply working within the established account practices and they may argue that Uefa’s decision to revise and update their regulations means it will be imposing an artificial longstop date on how the transfer fee is to be treated across the accounts.”
Other players who arrived in contracts lasting more than five years were Marc Cucurella, Wesley Fofana, Benoit Badiashile, Noni Madueke and Malo Gusto.
This summer they have begun a major clear-out of players who were already at Chelsea, including Kai Havertz, Kalidou Koulibaly, Edouard Mandy and Hakim Ziyech.